Things were slower following Super Bowl weekend, but picked up quite a bit this week. Not surprisingly, the biggest and most interesting funding announcements continue to be in and around Gen AI. VCs are writing big checks for conversational AI agents, deepfake detection and cloud infrastructure for AI workloads. Let’s dive in –
Recogni Secures $102 Million Series C Funding for AI Inference Systems
Recogni has successfully closed a $102 million Series C funding round led by Celesta Capital and GreatPoint Ventures joined by new investors Pledge Ventures and the Saudi Arabian Public Investment Fund (PIF)‘s TASARU Mobility Investments. Existing investors Mayfield, DNS Capital, BMW i Ventures and SW Mobility Fund also participated in the round.
The company will use the funds to develop its next-generation AI inference system that emphasizes high performance while significantly lowering power consumption and total cost of ownership.
Recogni seeks to address a critical challenge in the current Gen AI stack: the need for more efficient processing of complex models in both training and inference. Recogni’s technology offers a 10x improvement in compute density and power efficiency, allowing it to handle larger models while consuming less power, making AI applications more feasible and eco-friendly.
The company’s first product, Scorpio, is the world’s first 1 Peta-Flop class inference solution with low power consumption. Recogni’s technology could revolutionize industries like automotive and aerospace by enabling efficient and sustainable AI applications.
Efficient training and inference is getting increasing attention from investors. Other players in this space include Playground Global backed hardware players d-Matrix and Ayar Labs, recently buzzy “LPU Chip” provider Groqand Wafer-Scale Engine innovator Cerebras Systems.
Sierra: Conversational AI Platform Launches With $110 Million Backing
Sierra, a conversational AI platform co founded by ex-Salesforce co-CEO Bret Taylor and ex-Googler Clay Bavor, seeks to reshape customer service with the power of conversational AI. Founded in 2023, the company builds custom AI agents for businesses, enabling them to interact with customers for support, account management, and more. These agents, designed to be more personalized, efficient, and scalable than traditional methods, utilize a blend of proprietary and open-source models, including those from OpenAI and Microsoft, to deliver natural language interactions that are both helpful and authentic.
Backed by blue-chip investors Sequoia Capital and Benchmark to the tune of $110 mm, Sierra has already garnered the trust of notable clients including WeightWatchers and Sonos, facilitating hundreds of thousands of customer conversations per month. Enterprise chatbots powered by AI have been around a long time and there is plenty of competition even with next-gen capabilities. VCs continue to make bets here – I reported in the last edition of this newsletter enterprise conversational platform Kore.ai raised $150 mm led by FTV Capital, with participation from NVIDIA Ventures in late January.
Lambda Hits $1.5 Billion Valuation with $320 Million Funding Round
Lambda, a provider of cloud computing services and hardware focused on Gen AI, has secured $320 mm in a funding round at a $1.5 billion valuation. The round was led by the US Innovative Technology Fund, and includes a mix of new and returning investors, B Capital , SK Telecom, Supermicro, and T. Rowe Price. Lambda plans to utilize the funding to enhance their infrastructure for machine learning engineers, underlining the company’s rapid growth and broadening customer base in Gen AI.
Lambda was founded in 2012 with a focus on facial recognition software. In 2015, the company launched an app called Dreamscope that allowed users to apply AI filters to images. The app’s success, however, led to a hefty cloud computing bill, prompting Lambda to invest in its own infrastructure. That pivot ultimately led the company to its current business as a provider of computing services and hardware for other companies. Lambda has over 5,000 customers, including AI application platform Anyscale and Rakuten.
There is quite a bit of activity at the infrastructure layer of the Gen AI stack. I covered key players in Gen AI Infrastructure Cloud in an earlier edition of InfraRead, available here.
Bugcrowd Secures $102 Million to Scale Crowdsourced Security Platform
Bugcrowd, a prominent player in crowdsourced security, announced a strategic growth funding of $102 mm led by General Catalyst with participation from Rally Ventures and Costanoa Ventures. The infusion of capital will help the company extend its operations globally and augment the capabilities of its platform, which connects organizations with a community of security researchers to identify and fix vulnerabilities.
The company was founded in 2012 in Sydney, Australia and is currently headquartered both in San Francisco and Sydney. The current CEO took over in November 2022 and has been focused on rebuilding the management team. The business grew 40% last year and has yet to hit $100 mm in ARR. Customers include OpenAI and T-Mobile. This round seems a bit like a recap to me.
HackerOne competes with Bugcrowd and raised $49 mm two years ago. HackerOne is backed by GP Bullhound, Benchmark , New Enterprise Associates (NEA) and Dragoneer Investment Group.
Clumio Announces $75M Series D with 4X Growth in ARR
Clumio, a provider of data backup and recovery solutions for public cloud, has announced the closure of a $75 mm Series D funding round led by Sutter Hill Ventures, joined by existing investors Index Ventures and Altimeter Capital, and new investor NewView Capital. This funding, totaling $261 mm raised to date, is earmarked to fuel Clumio’s innovation efforts and expand its market presence, particularly in simplifying backup and recovery processes for public cloud customers.
The company also reported four-fold growth in ARR in 2023, attributed to a surge in enterprise customer acquisitions. Notable clients include Atlassian, LexisNexis, and Cava, among others. With over 100 petabytes (PB) of cloud data protected for hundreds of customers, Clumio has established a strong foothold in the market and is recognized as a pioneer in cloud compliance and governance.
Clumio competes with the likes of Cohesity, Rubrik, Commvault, Druva and Veeam Software.
BRIA AI Clinches $24 Million Series A to Foster Responsible AI
BRIA AI, a visual generative AI startup, has secured $24 mm in a Series A funding round, with backing from top ad agency Publicis Groupe and stock photo provider Getty Images. This investment marks an important step forward for BRIA’s differentiated approach to responsible AI content creation, addressing widespread concerns surrounding copyright infringement and ethical considerations within the industry. Unlike conventional models that often rely on indiscriminate web scraping for data, BRIA has forged partnerships with leading stock image providers including Getty Images, National Geographic photographers, and Alamy . By exclusively training its models on approved sources, BRIA strives to ensure creators receive proper attribution and fair compensation for their work.
The platform offers both API-based access and open access to its foundation models, enabling customers to seamlessly incorporate responsible AI into their solutions. BRIA prioritizes key enterprise value propositions such as high quality, consistency, and brand awareness in its offerings. The company’s “Brand Brain” module is designed to understand essential brand components and generate brand-aware content at scale, catering to the diverse needs of its clientele.
Over the past year, BRIA has experienced a surge in interest from enterprise customers including Publicis, WPP, and Getty Images, who leverage its platform for a wide range of applications. These include offering image generation and editing capabilities within software products, creating thousands of advertising copies at scale, and low-cost asset creation and editing using textual prompts.
Clarity Raises $16 Million for Deepfake Detection
Clarity, a technology company specializing in combating deepfakes and synthetic media generated by AI, announced a $16 mm Seed round led by Walden Catalyst Ventures and Bessemer Ventures. This funding will underwrite Clarity’s research efforts and enhance its solutions to address the growing threat of deepfakes. Already integrated with leading media publishers, government agencies, and enterprises, Clarity aims to expand its offerings to meet the escalating challenges posed by AI-generated content.
Deepfakes have been a topic du jour given conflicts around the world and the complete lack of meaningful controls on AI generated images and video. Clarity emphasizes the urgency of its mission to preserve trust in digital media. Co-founder and CEO Michael Matias highlights the critical need for accelerated research and market growth to combat the proliferation of deceptive content online. Amit Karp from Bessemer Ventures underscores Clarity’s significance in enabling organizations to combat the real threat posed by deepfakes, leveraging cutting-edge technology developed by cybersecurity and intelligence experts.
Clarity’s partnerships span various sectors, including news organizations, governments, and technology providers like Kaltura. The company’s initiatives include verifying media content, combating misinformation, and safeguarding against social engineering and phishing scams. With deepfakes becoming increasingly pervasive, stakeholders stress the importance of adopting robust media filtering mechanisms to protect organizations from potential harm.
AI Reliability Startup Guardrails AI Launches with $7.5 Million in Seed Funding
AI reliability startup Guardrails AI announced a $7.5 million seed funding round led by Zetta Venture Partners, with participation from Bloomberg Beta, Pear VC, Factory, GitHub Fund, and notable AI angels. This funding will support the expansion of engineering and product teams, advancing Guardrails AI’s mission to secure AI’s future by promoting open-source and collaborative innovation in AI risk management. Guardrails AI is co-founded by Diego Oppenheimer, who previously founded pioneering MLOps platform Algorithmia and subsequently sold it to DataRobot.
LangChain Raises $25 mm from Sequoia for LLM Application Framework Development
LangChain, an open-source toolkit for building applications leveraging large language models (LLMs), has raised a $25 mm Series A round from Sequoia Capital. LangChain provides developers a platform to streamline the creation of sophisticated, data-aware applications. LangChain’s libraries make Gen AI application development easier. The platform is evolving rapidly and has a sizable community around it. I’ve used it for hobby projects and like it though I don’t think it is quite Enterprise ready yet.
Other Stuff
Palo Alto Networks cited fatigue in Enterprise Cybersecurity spending – stock was down nearly 30% the day after earnings, pulling down other security names with it
Reddit publicly filed its S-1. The company plans to reserve a chunk of stock for 75,000 of its most active users
Password management platform 1Password acquired device health and contextual access management platform Kolide
Privileged Access Management platform Delinea is acquiring Identity Governance and Administration capabilities through the acquisition of Fastpath Solutions, LLC
Network security policy management platform Tufin is acquiring network monitoring company AKIPS
Siris Capital Group has made a “significant investment” in leading NPM platform Gigamon
My day job is advising growing companies on fundraising and M&A. If you are an investor or entrepreneur I’d love to connect.